The debt ceiling deal: This clause is bad for Social Security

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A clause in the debt-ceiling deal is going to be bad for Social Security

If there were no tax cheats in America, there would be no Social Security crisis. Benefits could be paid, and payroll taxes kept the same, for the next 75 years.

It’s just two years since the administration got into law an extra $80 billion for the IRS to beef up enforcement. That was supposed to include hiring an estimated 87,000 IRS agents. If this seems abstract, consider the context and how it affects you and your retirement — and the retirements of everyone you know.

Over the next 75 years, says the Congressional Budget Office, the entire funding gap for the program will average about 1.7% of gross domestic product per year.According to the most recent estimates from the IRS, tax cheats steal about $470 billion a year. And that figure is four years out of date, relating to 2019. That’s the figure after enforcement measures.But it still worked out at around 12% of all the taxes people were supposed to pay . And around 2.3% of GDP.

At last — just 40 or so years out of date — some are starting to talk about investing some of the trust fund like nearly every other pension plan in the world, in high-returning stocks instead of just low-returning Treasury bonds.

 

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